When Does Uninsured Motorist or Underinsured Motorist Coverage Apply in North Carolina?

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North Carolina requires that the insurance policy for all personal vehicles (non-commercial/non-fleet) have uninsured motorist (UM) coverage. The minimum UM coverage limit is $30,000 per person / $60,000 per accident and the maximum is $1,000,000 per person / $1,000,000 per accident for bodily injury. The UM property damage minimum is $25,000 and the maximum is the highest damage liability limits for any one vehicle insured under the policy.

When the at-fault vehicle in an accident has no insurance or their insurance either fails to meet state-mandated minimum liability requirements or is unable to financially pay it, uninsured motorist coverage applies. You may also be covered by UM if you’re the victim of a hit-and-run accident. Here’s an example of how UM coverage works – If you have the minimum coverage of $30,000 and you suffer $50,000 in bodily injury as a result of a collision where the at-fault driver was uninsured, your insurance would pay $30,000 and you will be left with the remaining $20,000 to pay by yourself.

Underinsured motorist (UIM) coverage is distinct from UM and applies when the at-fault vehicle in an accident has insurance, but not enough to cover the injuries or property damage caused. In these cases, the at-fault driver’s insurance pays the policy’s maximum amount, and your UIM coverage kicks in to cover the balance. Keep in mind, however, that the amount paid by the at-fault driver’s policy is first credited against your policy’s underinsured motorist coverage, therefor your UIM coverage must be greater than what the other driver’s policy paid in order for it to apply. For example, let’s say the amount of bodily injury was $100,000, the at-fault driver’s policy limit was $30,000, and your UIM coverage is for $50,000. The at-fault driver’s insurance will pay $30,000. Then your UIM coverage applies that $30,000 as a credit and pays the remaining $20,000 of your coverage limit. That leaves you with $50,000 of medical bills that are not covered by either party’s insurance at the covered limits in this scenario.

It’s always a good idea to request higher coverage limits on your vehicle policy so that you are protected as much as possible in the event of an accident. Stewart Law Offices is there for you when you need help. For assistance with your North Carolina case, call us at 866-783-9278.

Note: This information is for informational purposes and does not constitute legal advice. You can only receive legal advice by meeting with an attorney.


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